New Government: New Nuclear Plants Can Proceed Without Subsidies

Date: 13/05/10

New nuclear power plants will be built in the U.K. if utilities pay for them, said Chris Huhne, who was named yesterday as climate change secretary in a coalition government divided on the merits of atomic reactors.

Companies including E.ON AG, Electricite de France SA and Centrica Plc want to replace aging reactors in the U.K. as pressure grows to reduce emissions from fossil fuels. Huhne’s Liberal Democrats opposed atomic power while the Conservatives, their coalition partner, supported it. The parties yesterday said the Liberals will abstain on nuclear votes.

“If they come up with a plan which genuinely involves no public subsidy, and that’s the agreement of the coalition, then they’ll put it through the new national planning process, and the proposal will go forward,” Huhne said in an interview on British Broadcasting Corp. radio’s “Today” program. “We’re committed in the Liberal Democrats to not vote against it.”

The comments show how the two parties forming the government can bridge their differences on nuclear power and allow new construction to proceed. Analysts including Ben Caldecott, head of policy at Climate Change Capital in London, said yesterday that Huhne’s appointment could stall nuclear power because he’s unlikely to make it a priority.

Huhne said he intends to push forward measures to boost marine renewable energy sources such as wave, tidal and offshore wind, and that the outgoing Labour party left a “scandalous legacy” by not developing enough alternative energy during 13 years in government.

“We’ve got to get renewables up, and we’ve got to be much more energy efficient,” Huhne said. “The cheapest way to get more energy is to save energy.”

Subsidies

The U.K. generates about 5.5 percent of its electricity from renewable sources, according to the Renewable Energy Strategy published last year by the previous government.

U.K. utilities are preparing to close as much as 30 percent of their power-station capacity within the next decade as old nuclear and coal plants reach the end of their life in service. Energy regulator Ofgem has said about 200 billion pounds ($299 billion) of investment is needed over the next decade to replace aging infrastructure and cut emissions.

Subsidies on nuclear power in the 1990s added 11 percent to consumer electricity bills in the U.K., according to Ben Ayliffe, nuclear campaigner at the environmental group Greenpeace.

The Conservative Party, which won the most seats in last week’s election, said in its manifesto that it would “promote” nuclear power while avoiding public subsidies. The Liberal Democrats said they would “reject” a new generation of nuclear power stations on the grounds that there are cheaper ways to cut carbon emissions.

“There are a whole series of compromises struck in this agreement which are obviously unpleasant for the two parties,” Huhne said of the coalition agreement. “There is absolutely no disagreement between us on the key point that there will be no public subsidy.”